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Can R&D-Inducing Green Tariffs Replace International Environmental Regulations?

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  • Naghavi, Alireza

Abstract

This paper investigates the link between trade and environment by exploring the effects of green tariffs on the location of firms, innovation and the environment. It shows that tariffs levied on polluting goods could result in less global pollution than harmonization of environmental standards by inducing more pollution abatement R&D, generating lower unit emissions from production, and reducing competition. Green tariffs reduce pollution by (1) shifting production to the region where environmental standards are respected, (2) strategically inducing abatement R&D by the Northern firm by granting the latter a higher market share, (3) creating abatement R&D by deterring delocation.

Suggested Citation

  • Naghavi, Alireza, 2006. "Can R&D-Inducing Green Tariffs Replace International Environmental Regulations?," Climate Change Modelling and Policy Working Papers 12052, Fondazione Eni Enrico Mattei (FEEM).
    • Handle: RePEc:ags:feemcc:12052
    DOI: 10.22004/ag.econ.12052
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    References listed on IDEAS

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    Cited by:

    1. Weiguang Chen & Qing Guo, 2017. "Assessing the Effect of Carbon Tariffs on International Trade and Emission Reduction of China’s Industrial Products under the Background of Global Climate Governance," Sustainability, MDPI, vol. 9(6), pages 1-17, June.

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    More about this item

    Keywords

    Environmental Economics and Policy;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F18 - International Economics - - Trade - - - Trade and Environment
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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